The Nigerian Exchange Limited (NGX) and Pan African Payments Settlement System (PAPSS) have signed a Memorandum of Understanding (MOU) to integrate the payments system into the capital markets. This MOU will help boost cross-border securities transactions across African capital markets.
The MoU, signed in a virtual ceremony on Tuesday, February 28, saw attendance from notable individuals including the president, Afreximbank, Benedict Oramah and Director-General of the Securities and Exchange Commission, Nigeria, Lamido Yuguda; Chairman, NGX, Abubakar Mahmoud, among others.
Temi Popoola, CEO, NGX while giving his remarks said that integrating PAPSS into the cross-border capital market framework will fix issues with currency convertibility, reduce cost, shorten processing and settlement times and foster access to capital. “We hope that the success of this partnership will inspire other African nations to integrate with PAPSS to enable other member countries to benefit from improved efficiency.”
In his welcome remarks, Abubakar Mahmoud, chairman, NGX stated that investors will enjoy a more efficient and cost-effective way of investing in African securities, thus promoting regional integration and boosting trade flows.
Mike Ogbalu III, CEO, PAPSS said, “With the signing of this MOU with our strategic partner NGX, we expect more transactions to flow into our system, but we also expect more Central Banks to join the PAPSS infrastructure to extend the reach to millions more with the resultant positive impact on intra-African Trade.”
Read also: Barriers to inter-Africa trade: Minimising the bottlenecks in payment and settlement system
Oramah, whilst giving his remarks noted that PAPSS came about as a recognition of the need to integrate payments for goods and services in Africa amid the implementation of the African Continental Free Trade Agreement (AfCFTA). “Just as we want to ensure smooth settlements for goods, capital market integration is also critical. This is why we collaborated with NGX to facilitate forging PAPSS into the cross-border securities trading framework.”
Yuguda, DG, SEC stated that the signing of the agreement was a significant milestone in line with the revised Capital Market Masterplan. “SEC will support all initiatives to enhance the integrity and efficiency of the capital market.”
Expressing his optimism about the potentials of the initiative, the Chairman, Nigerian Exchange Group (NGX Group), Umar Kwairanga said the agreement will open up new market opportunities to capital market operators across the continent.
“It has come at the right time when Africa wants to accelerate the implementation of AfCFTA,” said Oscar N. Onyema, Group Chief Executive Officer, NGX Group. “It will stimulate the development of intra-African securities trading.”
Commending the initiative, Thalepo Tsheole president, African Securities Exchange Association (ASEA) called on stakeholders to come together and ensure it is executed across Africa. He emphasised that using the umbrella of ASEA, with 9 exchanges and a market cap of $1.5trillion, PAPSS could be instrumental to the African Exchanges Linkage Project.
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